How To Get An "Iffy" Loan Approved

By consumerist.comApril 1, 2008

Sometimes when you’re trying to get a borrower approved for a mortgage the system will tell you something stupid like “this person is not qualified.” Luckily, this internal document from Chase shows a few tips and tricks you can use to tweak a borrower’s profile so they can get a stated-income asset loan (which recently has received the unfair pejorative of a “liar’s loan” by the sensationalist media apparatchik) a piece of The American Dream. It’s specific to Chase’s internal loan approval system. Irregardless, many of the principles have universal application, no matter what level of the fast-paced exciting field of sub-prime mortgages you work. Highlights:

1. Bundle all compensation as base income, don’t break it down to commissions, bonuses and tips
2. Add gift funds to the base income
3. And if that still doesn’t work, just top off the income with an extra $500!

Full document as leaked to The Oregonian (turns out journalists are good for something other than reprinting our press releases, at least now the rest of us can learn from these advanced tips), inside…

As a (now unemployed- thanks in part to crap like this) Account Executive (bank rep that encouraged mortgage brokers to send their loans to my bank), I can say that this doesn’t surprise me in the least.

I KNEW other account execs where telling brokers to do this, as we constantly got loans like this. Brokers would tell me they were doing this, and get really confused when I told them that I couldn’t accept the loan. They would freely volunteer that they were…

1. Inflating income figures
2. Misrepresenting sources of income and assets
3. Not even asking the borrower for income (making it up themselves for whatever the loan needed to work)

Obviously, if they hadn’t been trained that this was acceptable, they wouldn’t be telling me offhand that they were doing it.

I didn’t work for Chase, and as I mentioned, we didn’t accept loans where we knew this was happening, but when the industry is trained that this is ok, you get these loans whether you want them or not.

As a former account executive (same job as Ms. “D Lish”), I can say that I’ve seen similar documents and “suggestions” given out.

I had to constantly coach against practices like this, as the bank I work for would terminate relationships if they found this happening, yet the brokers would be coached that this was “how you submit loans” by other AE’s.

This is not fake. Why does everyone assume that every single article posted today is fake simply because it’s April 1st? The fake articles stand out like a sore thumb. This holiday makes me fear for the future of humanity.

Keep in mind Chase’s “Zippy” is just the preliminary step in their process – loans still go to a live underwriter for approval or denial and anything “iffy” would get flagged. I think this is an important piece of the story that hasn’t been reported.